Monday, December 22, 2014

Edward the Car

I bought Edward, my 2004 Pontiac Vibe, the summer before my senior year of college. Nick and I finished paying him off about two years ago, and like most people- this car was the first thing that I officially owned!!

Edward has gotten into two fender-benders over the past 6 years, and the first one got us a new bumper and a little cosmetic work to the frame. Other than that, we have had no problems with the car and have done our regular maintenance and drove our 8 hour trip to Long Island and Watertown usually 4-5 times a year. He is now sitting with roughly 132,000 miles and a heater we sometimes need to hit to get it to work :/ 

Last month, while commuting home, a driver of a SUV decide to make a U-Turn in rush hour traffic right in front of Edward! Nick was amazing and swerved to the left so that the car was only hit on the wheel well of the rear passenger side of the car; otherwise we would have been T-boned on the passenger side- aka where I was sitting. Thanks Nick!!

We are lucky that the car is still drivable car and what looks to be only cosmetic damage was done to the car. The other driver took full blame and there insurance was willing to pay for all damages. So we brought the car in for an appraisal and took home a rental car.

The next part of this story can be summed up with one quick analogy: you go into the dentist for a cleaning and they tell you you’ll need a root canal or better yet, a new set of teeth :( 

Our Insurance Company called to tell us, our car had been TOTALED :(

Mind you, when Nick and I dropped the car off, it was driving fine and really just needed some cosmetic work on the rear wheel well, so this came as a bit of a shock!! We soon learned that "Totaled" for an insurance company equals the repairs adding up to more than 75% of the value of the car.

We were left with two choices, either we get the Kelly Blue Book value for the car now and our Insurance Company buys the car off us


Take roughly $1,000 less and keep the car, but it will be labeled as "Totaled," and we will need to get a new title for the car and re-do our inspection. This will also mean that we will be accepting the final payout for our car.  

So Nick and I had to make a hard decision and figure out financially what was the better option. If we sold the car we would get more money for it, but we would need to add a car payment to our budget. If we took the smaller check, we get less money for the car but hopefully get to keep Edward for another year or two before we need to start looking for a car, which would also means less student loan debt and hopefully more wiggle room to add a car payment into the budget.

So, needless to say we went with the smaller check. Our final rational really ended up being that we didn't plan on making money on this car to begin with. We planned on driving Edward until the repairs were worth more than the car, so we think we made out well. Plus, I like Edward and want to keep him around for a while longer!!

Financial decisions with emotional undertones are hard, but really laying out the pros and cons of this decision helped us come to a conclusion we are happy with. We will need to spend a little money on car cosmetics, but the rest can go into savings or the stock market to hopefully make us money until we need it to buy a new car. 

Wednesday, December 17, 2014

Month in Review- November

November and 9 months in...

We got back on track for November and did fairly well staying in budget, even with Thanksgiving. Saving money every month for the holidays really paid off!!
I was reminded this week by a good friend and mentor that this quest to live debt free is not always about paying off debt, but also about the shift in your mindset to stop living in debt. Making financial decisions based on money you have vs. spending money and finding a way to pay for it later. 

With this in mind, Nick and I have decided to attend a wedding in Egypt this upcoming May. We found an amazing deal on flights and looked through our budget to ensure that we could save enough money for the trip BEFORE we depart. We will be saving every penny we can and must stay within our monthly budget to make this happen. In total, we will be trying to save $3,500. 

This will also mean that additional payments to our student loan debt will fall to the back burner for the next few months. It is important to us to adjust our financial goals to ensure that we are not missing amazing opportunities to live life! Debt can be a shackle on our ankles, but we are lucky enough to have the ability and option to adjust our financial goals and still make progress toward a debt free lifestyle.

 November was filled with new financial decisions and a shift in our financial goals. 

Unexpected Costs: 
Happily nothing! We planned out ahead for Thanksgiving and we stayed within our monthly budget. 

Additional Income: 
AirBnB income over Thanksgiving helped to cover gas and drinks out with friends over the holiday weekend :)  

November Splurges:
 I don't think we had any splurges this month, but we definitely did enjoy ourselves with friends and family throughout the month!
5kTurkey Trot on Thanksgiving Morning- brrr!!!
Fun Memory: 

Nick and I both completed our first half marathon. It was called a Half-n-Half, you have to run half the race and eat a half smoked (A sausage like thing from Ben's Chili Bowl) and then run the second half of the race! It was a good day :) 

We also hosted a going away dinner for our two best friends in DC. It was alot of fun and also a very sad end to our November. We worked hard to plan the meal within our budget and adjust elsewhere so that we could put on the get together we really wanted to for their going away!  

Lessons Learned: 
We need to go back to a cash system for weekly expenses. This has worked well for us in the past. It keeps both Nick and me in check on how we spend money throughout the week on all the little things. If we forget toothpaste or bread at the grocery store and we each go out and spend money here and there it adds up quickly over the month to $100, something $200 dollars. This can really screw up our budget :) 

Total Payment to Debt: $0.00
Our additional money this month, $180 was moved to our Christmas fund. Nick and I originally weren't going to do Christmas presents for one another, but then changed our minds and decided to move the $180 to Christmas gifts. 

Current Debt: $173,746.44

We started with a total of 35 Student Loans.  We are on to our 33rd Student Loan.

#33 is currently at $1,711.16 with an interest rate of 11.5% . 

Current Savings for Trip: $0.00